U.S. Memory Stocks Rally Defiantly as Goldman Sachs Proclaims the Worst Is Over and Capital Returns

 

On Wednesday, U.S. memory chip stocks marched higher against a broader market retreat across major indices, a move partly catalyzed by a fresh client note from Goldman Sachs.

 

In the report, Goldman Sachs told clients that the worst phase of the memory semiconductor industry's downcycle may have run its course.

 

Sparked by the note, SK Hynix surged 7.05% to a record high, Micron Technology gained 2.75%, and SanDisk added 1.51%. The advance extends a robust multi-week upward trajectory across all three names over the past month.

 

Following weeks of range-bound consolidation, the sector's latest leg higher was accompanied by a noticeable expansion in trading volume, potentially signaling the onset of a stronger secular uptrend.

Goldman: Worst of the Cycle May Be Behind Us

Goldman noted that Micron and SanDisk have broken free from the downward pressure that weighed on their shares over the summer, pointing out that hedge fund positioning in the sector remains light and semiconductor volatility has dropped well below July peaks.

 

These indicators suggest investors are beginning to re-engage with the sector, even as fundamental corporate conditions remain largely unchanged from the previous earnings cycle, the bank said.

 

At the same time, Goldman cautioned that cyclical risks persist. Given that memory chip pricing, capacity expansion, and consumer spending can pivot rapidly, technical breakouts must ultimately be backed by fundamental earnings delivery.

 

That test could arrive as early as the end of this month, when Micron Technology is scheduled to report its fiscal fourth-quarter earnings after the market close on September 30—serving as an immediate near-term litmus test for the bullish thesis.

Capital May Be Re-Entering the Space

Goldman highlighted that the memory sector has forged a favorable technical setup over several weeks: semiconductor volatility continued to ebb after peaking in July, while memory equities consolidated through August.

 

In the bank's view, this pattern points to early-stage accumulation by institutional capital.

 

Hedge fund positioning warrants close attention: while funds trimmed exposure to memory stocks amid the broader summer market pullback, improving technical charts have opened the door for re-entry.

 

Goldman also observed that while the sector's recent gains are not yet outsized, the advance has been broad-based rather than isolated to mega-cap U.S. listings.

 

Across South Korea and Japan, memory equities have significantly outperformed the broader market, indicating a coordinated, sector-wide capital inflow.